I sold some of my bonds for a profit.

music selection:  “Just Between You And Me” — April Wine

The broad high yield bond market has been showing some unexpected strength.  On April 27, I had an opportunity to close some positions near par.

First was Ensco (ESV).  The 8.500 coupon was originally entered into on 9FEB2016 for 75.525.  I sold for 100.3.  About 65 dollars in interest was accrued and paid.  Round trip, after commissions, the return was 33.47% or 156.60% annualized.  Nice!

Second was US Steel (X).  The 7.000 coupon bond was entered into on 8DEC2015 for 63.000.  I sold for 99.9.  About 35 dollars in accrued interest was collected.  The round trip, after commissions return was 52.78% or 136.64% annualized.

Finally there was Scientific Games (SGMS).  The 8.125 coupon bond was purchased on 7DEC2015 for 79.000.  The sales price included about 21 dollars in accrued interest.  The round trip return was 22.33% or 57.40% annualized.

I also have a hopeful sell order in place for Freeport McMoran (FCX) open till cancelled at 98.900.  Currently pricing is 96.375 so any good news out of FCX could result in triggering.

Devour your prey raptors!

Update Discounted Bonds

Never miss another opportunity to devour prey!

5 thoughts on “Update Discounted Bonds

  • May 18, 2016 at 3:09 pm
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    Nice trades Raptor. You turn a nice profit in your trading activities. I added you to the Blogroll yesterday. You have much to teach us “non options” guys 🙂

    I hope your week is going well
    -Bryan

    Reply
  • May 23, 2016 at 10:54 am
    Permalink

    Raptor, mind sharing what you use for your bond selection criteria? Do you just pick “quality” companies that are currently being beat down?

    Reply
    • May 23, 2016 at 1:11 pm
      Permalink

      Tonka,

      I start with a screen for issues expiring in five years sorted by yield. I eliminate anything that isn’t publicly traded and then review financials to see who I think can repay or at least has solid assets for recovery. There is no magic except the magic of diversification. You’ll get burned if you buy one or two bonds. Buy 20 different companies and trust in the math.

      Reply

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